IS Magazine Blog

You have probably seen the scooters spread across your downtown if you live in a major metropolitan city. Our city of Columbus Ohio recently had the scooters added to our streets in addition to the Ohio State University. They look like fun and they seem inexpensive, but with charging and tracking, and breaking there’s no way they can last. So how do these scooter companies like Bird and Lime make money?

Lime offers bikes too so you have that option. They bicycles seem less popular, more expensive to rent and not as much of a burden to maintain than an electric scooter. And the bikes aren’t all over the sidewalks making it difficult for some to get past.

With the any new technology there might be money backing it, but there isn’t always profit being made.

According to some sources, there are 5 different companies offering scooters. The bikes are $1 per half hour. The Lime and Bird scooters are $1.00 to start and 15 cents a minute to ride. These prices look great for consumers but how can a company survive with these low rental fees?

How the Transaction Happens

Users start a rental by downloading an app onto their phones and entering a credit card prior to scanning the QR code on the vehicle. When they have completed their ride, they click on a button on their phone telling the company you are done, then the bike or scooter locks up until the next rider comes along. There is no need to dock, just leave it where you completed your ride.

Scale

The companies purchase their bikes and scooters in scale and therefore are able to obtain low purchase prices. Bikes that dock can cost up to $5,000, not a cheap price. Dock-less bikes are less. And the new dock-less model also saves the company from having to install and maintain the docks. But the scooters cost only a couple of hundred dollars and can get 20 rides a day in a busy city. They can pay for themselves in a week if the demand is there.